How will $3m super tax work when my balance goes all over the place?

The Australian Financial Review04-24

Your question refers to my previous column which included an example of a member with a super balance above $3 million at the start of a financial year – in this case, $4 million – who saw this ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2429149589?lang=en_US&edition=fundamental","thumbnail":"","is_english":true,"pubTime":"2024-04-24 03:00","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2429149589","market":"us","top_or_hot":-1,"title":"How will $3m super tax work when my balance goes all over the place?","media":"The Australian Financial Review","content":"<div>\n<p>Your question refers to my previous column which included an example of a member with a super balance above $3 million at the start of a financial year – in this case, $4 million – who saw this ...</p>\n\n<a href=\"https://www.afr.com/wealth/personal-finance/how-will-3m-super-tax-work-when-my-balance-goes-all-over-the-place-20240422-p5flkr\">Source Link</a>\n\n</div>\n","source":"afr_stock","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>How will $3m super tax work when my balance goes all over the place?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nHow will $3m super tax work when my balance goes all over the place?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-24 03:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.afr.com/wealth/personal-finance/how-will-3m-super-tax-work-when-my-balance-goes-all-over-the-place-20240422-p5flkr><strong>The Australian Financial Review</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Your question refers to my previous column which included an example of a member with a super balance above $3 million at the start of a financial year – in this case, $4 million – who saw this ...</p>\n\n<a href=\"https://www.afr.com/wealth/personal-finance/how-will-3m-super-tax-work-when-my-balance-goes-all-over-the-place-20240422-p5flkr\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4588","symbol_name":"碎股","start_time":0,"source_url":"https://www.afr.com/wealth/personal-finance/how-will-3m-super-tax-work-when-my-balance-goes-all-over-the-place-20240422-p5flkr","article_id":"2429149589","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2429149589","pubTimestamp":1713898800,"sourceInfo":{"source_id":"afr_stock","name":"The Australian Financial Review"},"weMediaInfo":null,"summary":"Your question refers to my previous column which included an example of a member with a super balance above $3 million at the start of a financial year – in this case, $4 million – who saw this increa","collect":0,"end_time":0,"defaultTopTitle":"afr.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4588":"碎股","BK4533":"AQR资本管理(全球第二大对冲基金)","BK4512":"苹果概念","MMM":"3M","BK4585":"ETF&股票定投概念","BK4206":"工业集团企业","BK4534":"瑞士信贷持仓"},"translate_title":"当我的余额到处都是时，300万美元的超级税将如何运作？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"MMM":1},"content_text":"Your question refers to my previous column which included an example of a member with a super balance above $3 million at the start of a financial year – in this case, $4 million – who saw this increase to $4.1 million 12 months later.How to work out the taxDetermining the Division 296 tax involves a two-step process. First is calculating the difference between the balance at June 30 in the latest financial year with June 30 the previous year. In this case, it was $100,000 ($4.1 million - $4 million = $100,000).The next step is working out what proportion of this increase applies to the amount greater than $3 million.This is achieved by deducting $3 million from the year-end balance of $4.1 million and working out what proportion this represents of $4.1 million ($4.1 million - $3 million = $1.1 million/by $4.1 million). The proportion that $1.1 million represents of $4.1 million is about 27 per cent.When applied to the $100,000 increase in the year-end balance, this will see $27,000 of earnings liable for the 15 per cent Division 296 tax, resulting in $4050.AdvertisementThis calculation makes no allowance for retirement income withdrawals or contributions to a member’s super during the year. This will make a difference because withdrawals are added to the taxable super balance while any contributions are subtracted. The idea is to make sure the balance reflects only the change in value.What happens if super fluctuates?Regarding your first question, Mansell says in year two (assuming no contributions were made and no withdrawals were taken from your super over that year), your super balance of $3.9 million would be $200,000 less than the previous year’s $4.1 million.This represents the change in the value of your super balance over that year, she says.Under the Division 296 rules, these negative earnings can be carried forward and offset against future positive earnings. It will see them treated in a very similar fashion to capital losses on investments where prior-year losses – also known as carry-forward losses – can be offset against capital gains in future years.In year three – again assuming no contributions were made and no withdrawals were taken over the year – the increased super balance of $4.2 million would be $300,000 more than the previous year’s $3.9 million.AdvertisementThe entitlement, however, to offset losses from year two will see this increase reduced to a net $100,000, which is the amount that will be liable for extra taxation.How this tax will be calculated involves applying the $4.2 million total super balance at the end of the year.With this balance value $1.2 million greater than the $3 million threshold, it will represent around 29 per cent of the $4.2 million balance.When the 29 per cent proportion is applied to the net $100,000 increase in the balance over the year, this means $29,000 will be taxable at 15 per cent.The bottom line, says Mansell, is that you would be liable to pay tax of around $4350 (ie, 29 per cent x $100,000 x 15 per cent) and you could choose to pay this from your super or personally.Q: Regarding the proposed $3 million super tax changes, does the government intend to apply this once or annually? Either way, it seems it will be an accounting nightmare to administer, particularly as the value of portfolios can go up and down annually. Will the government make any allowance for losses? TimothyA: The responses to the previous question should provide you with the answers you require, including how losses will be dealt with. The new tax regime will also apply annually and super funds must adapt to what is required.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2429149589"}